Lord Heseltine, who is an adviser on economic growth to Prime Minister David Cameron, has said the Government should have "reserve powers" to intervene when UK companies are targeted for takeover by foreign firms.
The comments came as American drugs giant Pfizer announced a bid for AstraZeneca, in what would be the biggest foreign takeover of a British firm.
Lord Heseltine said to the BBC:
"Foreign takeovers can often be hugely helpful. But, every other advanced economy has mechanisms of some sort on a fail-safe basis to scrutinise foreign takeovers and we're the only country that doesn't.
"I don't see any way in which this can be adequately done unless the Government has reserve powers" he said.
Pfizer has until Monday until it admits defeat in bidding for AstraZeneca. But after the shenanigans of the past few days we cannot be sure.
AstraZeneca's share price is tumbling back down to earth after the board rejected a "final" Pfizer bid. So is the takeover really over?
Sweden's Finance Minister says the Government should be "very, very sceptical" about any promises the US pharmaceutical giant makes.